9/14/2009 @ 3:11PM

''Remember The Lehman!''

More than a century ago, “Remember the Maine!” became the rallying cry for an event of which–even to this day–nobody knows the real cause. With America whipped into a frenzy by the sensationalist reporting of competing daily newspapers (“You furnish the pictures, I’ll furnish the war,” William Randolph Hearst cabled his correspondent in Cuba), the sinking of the USS Maine in Havana Harbor became the trigger that precipitated the Spanish-American War.

As we commemorate the one-year anniversary of the sinking of USS Lehman, we may pause to ask if a spirit of “Remember the Lehman!” will continue to stir up calls for the punishment of perpetrators, stricter regulation of the banks and the restructuring of oversight authorities–even though, as with the Maine, we may never really know the precise cause of Lehman’s demise.

From a historian’s perspective, even a year after Lehman’s bankruptcy it’s almost impossible to believe that even a perfect storm of subprime mortgages, naked short-selling and mismanagement could bring down an institution that–during its 158-year journey from a dry-goods merchant in the Deep South to a global financial services giant at the southern tip of Manhattan–had survived numerous major epidemics, the Civil War, 25 recessions, six panics, two Depressions, two World Wars, a 15-year occupation by
American Express
, a devastating terrorist attack, regulatory investigations and Lord knows how many boneheaded decisions made everywhere from the trading floor all the way to the executive suite.

The name Lehman will be remembered for a very long time. But with each passing year we’ll forget more and more of the details of its history and the events that surrounded its bankruptcy, and the word “Lehman” will come for stand for something else. As a historian, I’m loath to try to predict the future (I leave that to the economists, who do so very well), but I’d be willing to wager that the name Lehman will be remembered as synonymous with too big to fail.

For the next hundred years, whenever there’s a major financial crisis (and there will be), the cry “Remember the Lehman!”–or its equivalent–will reverberate from Wall Street to Capitol Hill. Will the fear of bringing down the entire system by failing to save a major financial institution spur regulators and legislators to make hasty decisions? History would tell us that it probably will.